Activity variances: These are the differences between the planned and actual budgets caused by the difference in planned and actual activity levels. Inaccurate estimates and forecasts can result in a significant difference between what was expected and what actually occurred. Poor resource planning and management also contribute to activity variance. The activity variances of Company L.

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Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 9, Problem 11E

To determine

Concept Introduction:

Activity variances: These are the differences between the planned and actual budgets caused by the difference in planned and actual activity levels. Inaccurate estimates and forecasts can result in a significant difference between what was expected and what actually occurred. Poor resource planning and management also contribute to activity variance.

The activity variances of Company L.

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Cullumber Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2025, Job 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $16,800, direct labor $10,080, and manufacturing overhead $13,440. As of January 1, Job 49 had been completed at a cost of $75,600 and was part of finished goods inventory. There was a $12,600 balance in the Raw Materials Inventory account on January 1. During the month of January, Cullumber Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were sold on account during the month for $102,480 and $132,720, respectively. The following additional events occurred during the month. 1. Purchased additional raw materials of $75,600 on account. 2. Incurred factory labor costs of $58,800. 3. Incurred manufacturing overhead costs as follows: depreciation expense on equipment $10,080; and various other…

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Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 9, Problem 11E

To determine

Concept Introduction:

Activity variances: These are the differences between the planned and actual budgets caused by the difference in planned and actual activity levels. Inaccurate estimates and forecasts can result in a significant difference between what was expected and what actually occurred. Poor resource planning and management also contribute to activity variance.

The activity variances of Company L.

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Answer 3

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Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 9, Problem 11E

To determine

Concept Introduction:

Activity variances: These are the differences between the planned and actual budgets caused by the difference in planned and actual activity levels. Inaccurate estimates and forecasts can result in a significant difference between what was expected and what actually occurred. Poor resource planning and management also contribute to activity variance.

The activity variances of Company L.

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Check out a sample textbook solution

See solution

Answer 4

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Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

Chapter 9, Problem 11E

To determine